Summary as Introduced
Amends the Grocery Initiative Act. Defines "independently owned" and "local ownership".
Staff Analysis
House Amendment 3
Statewide Innovation Development and Economy Act
SB 2008 (HFA 3) creates the Statewide Innovation Development and Economy Act, an omnibus economic development package aimed at revitalizing economically strategic sectors in Illinois through a combination of bonding authority, tax credits, and targeted grant programs. The bill consolidates several economic tools and reforms into one legislative package, with an emphasis on:
• Establishing STAR (Sales Tax and Revenue) bond districts to finance major development projects
• Creating the Advancing Innovative Manufacturing for Illinois Tax Credit
• Enhancing support for film production, data centers, apprenticeship programs, and enterprise zones
• Expanding research and development incentives under SBIR/STTR programs
• Revising tax withholding and reporting rules for out-of-state film workers
Major Components
1. STAR Bond Projects and Districts
• Authorizes counties and municipalities to issue STAR bonds to fund major tourism, retail, and entertainment development projects
• State sales tax revenue is used to repay bonds — capped at 50% of total development costs, up to $75 million per STAR bond district
• Limits one STAR bond project per Economic Development Region (10 statewide), unless grandfathered in under prior law
• STAR bond districts cannot be established in or partially in Chicago (municipalities with populations over 2 million)
2. Oversight and Approval
• All STAR bond districts and projects require final approval by the Governor’s Office, in consultation with the Department of Commerce and Economic Opportunity (DCEO)
3. Tax Credits and Incentives
• Advancing Innovative Manufacturing for Illinois Tax Credit: Supports manufacturers of critically demanded goods
• Film Production Services Tax Credit changes:
• Updates definitions for qualifying expenditures
• Extends eligibility for credits through 2039 (was 2033)
• Adjusts thresholds for “above-the-line” and “below-the-line” spending
• Tightens rules around related-party transactions
• Apprenticeship Education Expense Credit: Expanded to support workforce development
• Enterprise Zones: Additional designations permitted for qualifying economic development authorities
4. Business Development Grants
• Increases matching grant caps for small businesses under federal SBIR/STTR R&D programs
• Phase I: $75,000 (was $50,000)
• Phase II: $250,000
5. Tax Withholding for Loan-Out Companies (Film Industry)
• New rules on tax withholding for nonresident film workers paid via loan-out companies
• Ensures such workers are subject to Illinois tax when performing services in-state
6. Auditor General Authority
• Expands auditing powers under the Illinois State Auditing Act for programs authorized under the Act
County Impacts
Potential Benefits
• Bonding Authority: Counties gain new tools to finance large-scale economic development projects via STAR bonds. These can catalyze tourism, job creation, and retail growth, especially in underdeveloped areas
• Inclusion in State Programs: Counties are eligible participants and administrators of STAR bond districts, putting them at the center of planning and revenue-generating projects
• Rural and Downstate Benefits: With Chicago excluded, counties outside the City of Chicago are prioritized for STAR bond projects, potentially enhancing regional equity in economic development funding
• Apprenticeship Credit & Manufacturing Tax Incentives: Can support local workforce development and attract advanced manufacturing to county jurisdictions
Potential Concerns
• Centralized Approval: The Governor’s Office and DCEO retain final approval authority over all STAR bond designations and projects, limiting local autonomy
• Revenue Risk: Counties issuing STAR bonds must be cautious, as reliance on state sales tax increments for repayment may introduce fiscal risk if projected revenues fall short
• Administrative Burden: Participation in new tax credit or bonding programs may require additional county-level staffing, planning capacity, and auditing compliance
Technical Changes to County Code
• The legislation amends the Counties Code, likely to authorize STAR bonding procedures and compliance mechanisms, though the amendment language is not detailed in this summary
Conclusion
SB 2008 (HFA 3) represents a significant economic development initiative with direct implications for Illinois counties. By authorizing counties to issue STAR bonds and access new tax incentives and grants, the bill provides enhanced tools for local economic development. However, the centralized approval process and financial complexity of STAR bonds mean counties must approach participation strategically and with fiscal prudence. Counties should consider integrating planning, economic development, and finance staff in early assessments of STAR bond opportunities under this Act.